News of the great victory at Penghu, like a boulder thrown into calm waters, stirred up towering waves along the southeast coast and quickly spread to even more distant oceans.

"The new Xia dynasty warship, with twenty-four cannons on its broadside, unleashed a salvo that severely damaged the Dutch flagship!"

"The Dutch commander of Penghu, Putmans, has been captured, and the entire fleet has been annihilated!"

"Zheng Zhilong has been appointed General of Pacifying the Seas, and is in command of the Royal Maritime Fleet!"

These news brought joy to the coastal people who had suffered from the invasions of Japanese pirates and foreign barbarians, gave merchants in the southeast hope for the smooth opening of sea routes and the revival of trade, and silenced the conservative faction in the court who still had objections to opening up the sea and spending huge sums of money to build new warships.

But behind the celebration, undercurrents have already begun to stir.

The first to get restless were the Portuguese.

Haojing, Council Pavilion.

The Portuguese Governor of Macau, Fernando, looked at the detailed battle report from Penghu with a gloomy expression, his fingers unconsciously tapping on the smooth mahogany tabletop.

"Your Excellency Fernando, we must be vigilant."

The Bishop of Macau spoke solemnly, "The Bactrians built such powerful warships and defeated the Dutch. Who will be their next target? The remnants of the Dutch entrenched in southern Taiwan, or... us?"

"And the Spaniards too!"

A business representative said urgently, "Their fleet in Manila, and their strongholds in northern Taiwan (Keelung and Tamsui), are equally in danger! The Emperor of Great Xia is ambitious; he doesn't just want Penghu, he wants naval power over the entire South Pacific!"

Governor Fernando certainly understood.

Portugal's power in the Far East had long since weakened, and it was only through the "tolerance" of Bactria that it was able to lease Macau and conduct trade.

Once Da Xia decides it no longer needs them, or finds them a hindrance, how can Macau, such a small place, withstand that terrifying "Azure Dragon"?

"Send someone immediately, no, I will write to the Spanish governor of Manila and the governor of Goa (the Portuguese governor of the Indian colony) myself."

Fernando made up his mind: "We must unite. The Dutch are our rivals, but the rise of Bactria is a common threat to all European maritime powers in the Far East! We cannot stand idly by and allow them to dominate, monopolize trade with China, and even drive us out of these waters!"

Almost simultaneously, the Spanish Governor-General of Manila, Coquela, also received a similar report.

The Spanish operated in the Philippines for many years, and Manila was the famous starting point of the "galloping ship trade" in Asia, continuously transporting silver from the Americas to exchange for Chinese silk and porcelain, making huge profits.

They also cannot tolerate a powerful, uncontrolled Chinese navy appearing on their doorstep.

"The ambitions of the Great Xia Emperor will never stop at Penghu."

The governor of Coquela said to his officers, "The Dutch are wolves, and Bactria is a dragon awakening. The wolves have been driven away, but will the dragon allow us 'Tainos' (his derogatory term for the local inhabitants, referring here to the Spaniards themselves) to continue sleeping soundly beside his bed?"

"We must unite the Portuguese, along with the remnants of the Dutch in Batavia, to form a powerful combined fleet."

Coquela's eyes gleamed. "Taking advantage of the Great Xia Navy's recent victory, they might be complacent, or perhaps they're not yet fully formed. Let's deliver a heavy blow! At the very least, we must destroy that terrifying 'Azure Dragon,' destroy their shipyard, and ensure they dare not even glance at the seas for the next ten years!"

A shared sense of crisis led these two Iberian Peninsula nations, locked in a protracted struggle over continental Europe and their colonies, to temporarily set aside their differences.

Secret messengers frequently traveled between Macau and Manila.

A treaty aimed at "containing the maritime power of the Great Xia and maintaining the status quo and free trade in the Far East" is under intensive negotiation.

The Portuguese provided funding, intelligence, and the port of Macau as a base; the Spanish, in turn, deployed the main force of their fleet stationed in the Philippines—four large galleons, along with several auxiliary vessels.

Meanwhile, the Dutch East India Company headquarters in Batavia was gripped by a mixture of rage and panic upon learning of the disastrous defeat at Penghu and the capture of Putmans.

The company's board of directors refused to pay the exorbitant ransom demand without hesitation and ordered retaliation at all costs. However, they were far apart, with their main fleet scattered across the Indian Ocean and the Spice Islands.

In the short term, all they could do was order the garrison at Fort Zeelandia in Taiwan to strengthen its defenses and send a fast ship, carrying a large sum of money and promises, to join the Macau-Manila conspiracy, providing the Great Xia Fleet with detailed intelligence on Penghu and the firepower data of the "Azure Dragon".

A noose is silently tightening at sea, targeting the newly formed navy of Great Xia.

The execution site, where the noose was set, was chosen to be a secluded sea area along the Fujian coast—Liaoluo Bay.

The waters there are relatively open, making it easy for large fleets to deploy. It is also close to the mainland, making it easy to obtain supplies. Furthermore, it is far from the main base of the Great Xia Navy, making it an ideal battlefield for ambush or decisive battle.

These fragments of intelligence, gathered piecemeal through Zheng Zhilong's extensive network of informants at sea, scattered testimonies from captured Dutch sailors, and channels of Han Chinese compradors in Guangzhou and Macau who had dealings with Portuguese and Western merchants, eventually reached Zheng Zhilong, who had just moved to Xiamen to oversee the aftermath of the Penghu incident and the reorganization of the fleet.

"The Portuguese and Spanish have joined forces? And they're even dragging in the remnants of the Dutch?"

Zheng Zhilong frowned as he looked at the several vague but consistent secret reports in his hand.

He knew these Westerners too well; they fought like mad dogs when they fought each other, but when faced with a new power that might threaten their common interests (monopolizing trade in the Far East), they would join forces without hesitation.

"Target: Liaoluo Bay? They want to ambush me there?"

Zheng Zhilong walked to the nautical chart, traced his finger along the Fujian coastline, and finally stopped at the location of Liaoluo Bay.

A cold, sinister smile, befitting a pirate king, appeared on his lips: "Dream on."

Without the slightest hesitation, he immediately picked up his brush and wrote a secret memorial, which included intelligence that Portugal, Spain and the Netherlands might unite to harm the Great Xia navy in the waters near Liaoluo Bay, as well as his own judgment and suggestions for countermeasures. He sent it to the capital overnight by express ship.

"You want to team up and strangle me? Then let's see if your plank boat is tougher, or if my 'Azure Dragon's' teeth are sharper!"

Zheng Zhilong gazed at the rising waves of the sea outside the window, his eyes burning with fierce fighting spirit.

He knew that the victory in Penghu was just the beginning, and the real test was about to begin.

Jinling, the Imperial Palace.

Xiao Chen received a secret memorial from Zheng Zhilong, delivered by express courier.

He carefully read the report about the possible alliance of Western colonialists, as well as Zheng Zhilong's suggestion that "if the enemy unites, their strength will be immense. We should gather our main forces and take the initiative to seek an opportunity for a decisive battle, so as not to allow them to make arrangements at their leisure and turn the tables on us."

"Liaoluo Bay..." Xiao Chen's finger gently tapped the bay on the map.

"It seems someone is trying to give my Maritime Affairs Bureau a hard time."

He raised his head, his eyes showing no fear, only a sharp, knife-like glint.

"deliver an imperial order!"

"General Zheng Zhilong, the Pacification General, is hereby appointed to have full command of all ships under the Royal Maritime Administration and to control the navies of Fujian, Zhejiang, and Guangdong provinces!"

"Order the Longjiang Shipyard and Fuzhou Shipyard to expedite the construction of all warships, both completed and under construction, and deliver them to the navy immediately!"

"Order the Tianjin Artillery Factory and the Nanjing Ordnance Bureau to urgently transport all their stockpiled 'Yuanfeng Cannons' and qualified ammunition to Xiamen!"

"The Ministry of Revenue and the Ministry of War are hereby ordered to do everything in their power to ensure the supply of provisions, military equipment, and provisions to the southeastern coastal regions, without fail!"

"Tell Zheng Zhilong," Xiao Chen's voice echoed resolutely throughout the palace, "that I have entrusted him with the entire maritime resources of Great Xia! Fight! Fight fiercely! Right here in Liaoluo Bay, blast those barbarians and Portuguese with their delusions, along with their wrecked ships, to the bottom of the sea! This battle must not only be won, but a complete victory! We must secure thirty years of maritime peace!"

The imperial edict, carrying the will of the empire and the emperor's determination, flew to the southeast.

The entire empire's war machine began to operate at high speed for a decisive battle that would determine the ownership of maritime power in East Asia.

Dark clouds gathered over Liaoluo Bay, signaling an approaching storm.

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